A Grant Agreement documents funding terms for projects or research initiatives. This playbook explores performance milestones, reporting requirements, and clawback conditions.
Why This Matters: Clear change of control and assignment provisions prevent disruption of contractual benefits and obligations, protecting both parties from unexpected counterpart performance changes.
Negotiation strategy
If you're the Grantor:
Ensure that any change of control or assignment does not adversely affect your business interests. Negotiate for the right to terminate the agreement if the new party is not suitable.
If you're the Grantee:
Seek flexibility in assigning the contract to affiliates or in the event of a corporate restructuring. Ensure that consent for assignment is not unreasonably withheld.
Essential elements
1
Change of Control Notice
Written notice within 30 days.
2
Assignment Consent
Prior written consent required.
3
Automatic Assignment
Assignment in corporate transactions.
Action framework
ACCEPT
Propose edits when the clause lacks clarity on notice periods or consent requirements.
EDIT
Reject if the clause allows assignment without any consent or notice.
ADD
Add language for automatic assignment in mergers or acquisitions.
PRO TIP
Always ensure that assignment clauses align with your strategic goals and risk management policies.
Example clauses
FAVORABLE
Preferred Change of Control Clause
"In the event of a Change of Control of either party, the affected party shall provide written notice to the other party within thirty (30) days of such Change of Control. The non-affected party shall have the right to terminate this Agreement upon thirty (30) days' written notice if it reasonably determines that the Change of Control will have a material adverse effect on its interests under this Agreement."
NEUTRAL
Standard Assignment Clause
"Neither party may assign or transfer any of its rights or obligations under this Agreement without the prior written consent of the other party, which consent shall not be unreasonably withheld, conditioned, or delayed."
UNFAVORABLE
Unrestricted Assignment Clause
"Either party may assign this Agreement without notice or consent from the other party."
Fallbacks
High-Risk Projects
In high-risk projects, ensure that any change of control or assignment is subject to stringent review to protect project integrity and outcomes.
Cross-Border Transactions
For cross-border transactions, consider jurisdictional differences in assignment laws and ensure compliance with local regulations.
Start-Up Acquisitions
In start-up acquisitions, flexibility in assignment can be crucial for facilitating growth and investment opportunities.
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